(Alliance News) - Biotechnology company ValiRx PLC on Tuesday warned its financial position remains "very weak", with insolvency looming.
Shares were 15% lower on Tuesday morning in London at 0.047 pence each, bottoming earlier at 0.042p. They have lost 90% of their value over the past 12 months,
In mid-February, shareholders rejected a motion proposed by ValiRx to allow it to issue new shares to raise some funding. ValiRx had warned in January a lack of shareholder backing would "impair" its ability to keep funding clinical trials.
At the time, ValiRx said it was dependent on relief from creditors to keep going. It was also looking at other sources of funding.
The company on Tuesday announced a new shareholder meeting, to be held on March 25 in London. ValiRx wants to consolidate 125 existing shares into one share, then sub-divide that share into one new ordinary share and one new deferred share.
This plan comes after speaking with shareholders following the rejection of the attempt to issue new shares.
Last week ValiRx said a group of investors owning more than 5% of the firm asked for a meeting to remove Chief Executive Satu Vainikka and Chief Operations Officer George Morris. On Tuesday, it said a circular will be posted shortly convening that meeting.
"The company announced on February 17 it had limited cash resources and that it was dependent on the ongoing cooperation and support of its creditors to manage its working capital position," said ValiRx.
"The company's working capital position remains extremely weak, with the company being dependent on the support of its creditors to continue trading. In the event that all resolutions are not passed at the forthcoming general meeting it is unlikely that the company will be able to raise further capital and would unlikely be able to continue trading," it added.
By George Collard; georgecollard@alliancenews.com
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ValiRx (VAL)